Bad example

I am back from a week in Monterey, a place I had not visited before. It is the richest, whitest town I have been in for a long time. To be precise, since spending a few weeks in Essex, Connecticut, in 1985.

It is also very clean and neat. Even the bums are well-clothed and have salon haircuts.

Monterey is also the poster child for the wickedness and stupidity of free market capitalism. When the Americans, Chinese, Japanese and Portuguese got there, starting around 1840, they found inexhaustible riches of otters, whales, salmon, sardines, abalone, deer and elk.

In the free-for-all, they quickly exhausted them.

This orgy of destruction would be mostly forgotten had John Steinbeck not written “Cannery Row,” a book so simple and short that even a capitalist ought to be able to understand it. They didn't, though.

Ed Ricketts, the real-life Doc of the novel, and other biologists warned the sardine packers that they were going to kill the fishery. The capitalists scoffed. The proletarians, too, for the most part, although they were not in a position to have their opinions counted.

It wasn't as if Ricketts was predicting something that had never happened before. It had happened, just about 20 years earlier, not far away in the San Juan Straits and for exactly the same cause – overfishing for canning killed the salmon fishery forever.

In the last great year of the salmon fishery, the capitalists didn't bother even to pack most of the salmon. There was thought to be an insufficient market, so the fish were caught and dumped.

The canners of sardines added a new stupidity. In their greed, they concluded that if they could eliminate labor costs, they could make even bigger profits.

Let's stop a moment and consider this labor. It was not well-paid, and since the canneries worked only half the year, was either idle or thrown upon other resources half the time. No worker did well out of sardines, but since unrestrained finance capitalism had wrecked the economy, they were desperate for anything.

It is often claimed that market forces allocate resources better than any other method ever tried. Monterey proves this to be nonsense.

The greatest utility value, to humans, of the Pacific sardine was as a food fish. It was cheap protein, as little as 10 cents a case before World War I. The early canners boiled the innards, heads and trash to a slurry, which was dried, sacked and sold for fertilizer.

This was sensible.

However, technical advances made it possible to easily harvest and convert whole – good to eat for people – sardines into fertilizer. Since that avoided all that cannery labor, the profits to the packers were higher, even though the unit price they sold at was lower.

Government regulators sought to sustain the wealth of the fishery by imposing catch seasons. The capitalists responded by innovating; they designed factory fertilizer ships that operated in international waters. In one year, they destroyed the fishery.

It never came back. While on Cannery Row, I ate two sardines for lunch. They cost me nearly $10 a piece.